America’s passion for pets hardly slowed in the recent recession, but for many of those years, veterinary prices not only failed to keep up, but fell steadily. While they’re still well below government estimates for other consumer goods and services, the updated Nationwide® | Purdue Veterinary Price Index shows 2015 to be the year when veterinary pricing finally started to recover.
While that’s good for the struggling veterinary community, the news isn’t bad for pet-owners, either. The cost of taking a pet to the veterinarian remains a relative bargain, even with increases in 2015.
The Nationwide® | Purdue Veterinary Price Index‘s most significant finding is that despite years of falling, prices of veterinary medical services increased in 2015 at a rate above that for all consumer prices (3.7% vs. a 1.2% rise in the CPI overall). Well-care treatments continued to pace the CPI (1.3% rise in 2015), while medical treatments drove the increase with a 4.4% increase in 2015. Despite the increase, medical treatment pricing remain below where it was in 2009.
Veterinary pricing remained lower in the South and Midwest regions, despite a 10.1% increase in the Price Index in the latter. in 2015. The Northeast region remained the most expensive, but was the only region where prices decreased in 2015. By population density, urban areas remained the most expensive while posting the highest increase, over suburban and rural areas.
Veterinary pricing update presented at AVMA
Dr. Kerry O’Hara, Nationwide Pet’s Director of Research and Marketing Strategy, and I presented the latest analysis at the AVMA Convention earlier this month. It was our third presentation since the launch of our Nationwide® | Purdue Veterinary Price Index, developed in collaboration with the Krannert School of Management, at the NAVC conference in January of 2015.
The Veterinary Price Index draws upon actual data from more than 15 million pet health insurance claims and 18 million treatments. In contrast, the federal government draws its estimate of veterinary information from self-reported pricing reported in in hundreds of veterinary hospital interviews. The U.S. Consumer Price Index (CPI) has held that veterinary costs have increased steadily from 2009 to 2015 and at higher rate than all consumer prices. The Nationwide | Purdue study shows pricing gains in 2015 only after years of decline, and all veterinary pricing well below all federal government estimates.
After the last Nationwide® | Purdue Veterinary Price Index showed that veterinary costs had hit bottom in late 2014, we were interested to see if data from all of 2015 would reveal continued recovery or a short-term correction followed by flat or even falling pricing. While a 3.7% increase in the price index in 2015 is noteworthy, over the entire six-year study period veterinary costs are still showing to be a bargain in today’s economy.
By sharing these trends, Nationwide hopes the information from our peerless proprietary claims data will help veterinarians and practice managers with a better understanding of companion animal veterinary pricing. I also hope it helps pet owners understand what they see on their veterinary invoice in a broader context.
The next update of the Nationwide® | Purdue Veterinary Price Index will again by at NAVC, as we’ve settled into presentations there and at AVMA each year. A free executive summary of the Nationwide | Purdue Veterinary Price Index can be downloaded here, along with past releases of the study and a detailed explanation of the index’s methodology.